Supreme Court

Business Associations

Oppression claim was properly dismissed

R and M incorporated company but rarely complied with requirements of Canada Business Corporations Act. In May 2005, M resigned as officer and director of corporation. Corporation alleged M had also resigned as shareholder and accordingly transferred his shares to R. M applied for oppression remedy under s. 241 of Act, alleging he was still shareholder. Trial judge dismissed M’s claim, rejecting M’s version of events and finding that as of May 2005, M did not wish to be shareholder and asked to be removed. Court of Appeal dismissed M’s appeal. M appealed to Supreme Court of Canada. Appeal dismissed. Oppression claim was properly dismissed. Trial judge’s factual findings were not reviewable because no palpable and overriding error had been made. Fact that corporation fails to comply with requirements of Act does not, on its own, constitute oppression. M could have had no reasonable expectation of being treated as shareholder: he no longer was and expressly demanded not to be so treated. Corporation’s failure to observe corporate formalities in removing M as shareholder in accordance with his wishes could not be characterized as unfairly prejudicial to extent that omission deprived him of shareholder status.

Mennillo v. Intramodal inc (2016), 2016 CarswellQue 10615, 2016 CarswellQue 10616, 2016 SCC 51, 2016 CSC 51, McLachlin C.J.C., Abella J., Cromwell J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J. (S.C.C.); affirmed (2014), 2014 CarswellQue 10625, 2014 QCCA 1515, Gagnon J.C.A., Vézina J.C.A., and St-Pierre J.C.A. (C.A. Que.).

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